How can I calculate Franking Credits?
We have provided examples on how to work out franking credits manually using formulas for both a fully franked and partially franked dividend.
Fully Franked Dividend Calculation
The formula to calculate franking credits (assuming they are 100% franked) is;
Franking Credits = (Dividend Amount / (1-Company Tax Rate)) – Dividend Amount
An example is below assuming a $70 dividend that is 100% franked;
Franking Credits = ($70 / (1 – 0.30)) – $70
= ($70 / 0.70) – $70
= $100 – $70
As the franking credits are worth $30 the total dividend grossed up including franking credits is $100.
What about partially franked?
To easy we do the same calculation but adjust the answer. If the dividend above was only 50% franked we simply adjust the franking credit by the percentage
Franking Credits at 100% = $30
Franking Credits at 50% = $30 * 0.5
In this partial franked example the grossed up dividend would only be $85 as the dividend was only 50% franked instead of 100% franked.
Do you have an Online Franking Credit Calculator I Can Use?
Yes, use our online franking credit calculator.